A Discussion of Psychology and Business Research

This study looked at 75 CEOs of Major League Baseball teams over a 100 year period to find the impact of CEO personality on four different strategic outcomes. The study found that CEOs with transformational leadership styles were positively related to ratings of influence, team winning percentage, and fan attendance. Contingent leadership styles were negatively related to manager turnover and ratings of influence.

Methodology

The study used trained undergraduates to create a profile of roughly 5,000 words based on historical documents such as biographies for each Baseball CEO over time. These profiles were then scored to define the personality score for each individual. Excellent steps were taken throughout the study to account for the impact of important criteria in the study. These included changes in writing style over the 100 year period, historical fan attendance levels, and other factors that may have impacted the results.

For the purpose of the study, CEO personality was divided into two categories “bright-side” or core self evaluations and “dark-side” or narcissism. The Transformational Leadership Behavioral Inventory was used to measure transformational leadership and transactional leadership while the adjectives from the Gough Adjective Check List were used to describe personality. The “bright-side” characteristics were positively related to transformational leadership and the “dark-side” characteristics were negatively related to contingent reward leadership.

Study Thoughts

The study overall was quite interesting and well executed given the large scale of the effort. One unique perspective this study yields is the ability to look at an industry in its entirety and treat each team as an independent organization. On the other hand, this isolated system did limit the sample size since there were only 75 CEOs who could be included. While this is a large segment of the total CEO population over the past 100 years, it does temper the conclusions being drawn from the data. Although the study did a good job using the available data, it would be interesting to see how other personality characteristics impacted the strategic outcomes listed.

So What?

The study was excellent in that it approached an interesting industry, controlled for many historical conditions, and came up with meaningful findings about how personality impacts key strategic outcomes in Major League Baseball. This study does lend additional evidence to the argument that CEO personality trickles down to the bottom line. Perhaps the most interesting finding was that “… all else being equal, having a CEO one standard deviation above the mean on transformation leadership predicts winning an extra five games per year during the CEO’s first 3 years in office.” Given the use of wildcard playoff births, this finding alone has important implications for Major League Baseball teams making the playoffs.